The Greek government introduced a new regulation to strengthen protection for primary residences, as announced by Kyriakos Pierrakakis.
The reform modified the out-of-court debt settlement mechanism, allowing debtors for the first time to separate their primary residence from their other assets. This change enabled greater debt write-offs and lower monthly repayments.
Officials said debtors could choose to protect their main home in exchange for liquidating their remaining assets. The calculation of debt reductions and instalments would depend on the value of the primary residence relative to total debt owed to financial institutions.
How the Regulation Works
Under the new framework, the system calculated repayment proposals based solely on the value of the primary residence, if the debtor chose this option. Other assets were excluded from the calculation but would be liquidated through electronic auctions.
The process aimed to be fast and efficient, offering a “second chance” to borrowers seeking to settle debts while securing their homes.
Key Features
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The algorithm considered only the value of the primary residence.
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Property value was based on either market value or tax-assessed value (ENFIA).
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Other properties were included for liquidation via e-auction.
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Debtors retained the right to accept or reject the proposal.
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Accepted proposals led to a formal restructuring agreement.
Benefits of the Reform
The new regulation delivered significant debt reductions and lower instalments, provided the property value was lower than total debt.
It ensured the protection of primary residences through gradual repayment aligned with property value, while secondary assets were sold to reduce overall debt burden.
Officials noted that the approach followed the same principle as previous housing protection tools—repayment based on property value—but introduced improved flexibility and effectiveness.
greekcitytimes.com.
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